David Willetts, the Science Minister, agreed the deal at the European Space Agency’s (ESA) Ministerial Council in Naples, where he pledged that it would lead to "major" contracts for British companies.

Part of the agreement will see Britain make a £16m contribution to the International Space Station in the form of communications and propulsion technology for a new manned capsule named Orion.

Mr Willetts said the rare foray by Britain into manned space activity, which he described as a "one-off", would bring business to British companies.

The overall £240 million per year investment will bring £1 billion annually to British businesses in new contracts, and grow the UK space industry into a £30 billion industry by 2030, officials said.

The funding, provided through the UK Space Agency, will be split between the ESA's mandatory science budget and ten optional programmes including the International Space Station project.

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Mr Willetts said: “Space is big business for the UK so it is important for us to make strategic investments that will continue the growth of this thriving industry.

"The programme of investment we’ve negotiated at ESA will not only allow us to get ahead in the global race by securing more major contracts for UK industry, but will also provide us with the tools to manage major challenges like disaster relief and climate change.”